My Student Loan Story

All my life, my parents drilled into me that I had to do well in elementary school, so I could do well in high school, so I could do well in college, so I could get a good job. Naturally, going to college was the only option I saw ever saw for myself less I become a disappointment in my parents eyes. I took my parents advice. I finished in the upper third of my high school class and scored high enough on my SATs to make me a great candidate for just about any non Ivy league school.

After touring many colleges, I fell in love with Northeastern University in Boston. I applied and I was accepted. They offered me a fairly sizable scholarship, and my parents told me that they would certainly help me pay back some of my student loans.

In that magical September of 2003, I went off to college.

Let’s flash forward to graduation. It was the fall of 2007. I was ready to graduate and I had no idea what I wanted to do. My original plan was to go on to law school, but after bombing on the LSAT, I basically lost confidence in myself and decided not to apply for law school right away. Instead I halfheartedly applied to various jobs that I never considered prior to my job search. I could not get an interview any where. Without any prospects, I had to move home at the end of December in 2007. I remember thinking, “moving home is only temporary. I’m going to find a job and everything is going to be ok.”

I cannot remember exactly when I learned how much I had borrowed for school, but if I did not know at some point before the January of 2008, I certainly knew about it then. All in all, it was $80,000.00+. I experienced what many of you know as “sticker shock”. I thought I borrowed a lot of money, but I had no idea it was that high!

Payments were soon scheduled to start at $300 to $400 a month. For someone who was making zero dollars, that was an unfathomable amount to be paying every month. I had also thought that my parents were in good shape financially and that they would be able to help me out. That expectation turned out to be wrong. They told me that they were planning to file for bankruptcy.

My job search continued. As we now know, the winter of 2008 was when the US economy took a massive nosedive. I went on a few interviews every now and then, but I could not get a job. My mom suggested that I enroll in a paralegal certificate program at Boston University. The class was not that great, but I guess it helped, because between the certificate program and with a little help from a friend of my dad’s, I was able to get my first paralegal job. It started out at a whopping $10 an hour, and only 15 hours a week. I guess I had to start somewhere.

In the meantime, I started dealing with my student loans. I deferred most of my loans for as long as I could. As I learned more about student loans, I made a couple of discoveries:

Realization 1: Deferring your loans does not stop interest from accruing on most loans. In fact, interest had been accruing on my loans all along! I thought that didn’t happen until after I graduated.

Realization 2: Any interest that accrues is then added to the principal balance. Then the loan starts growing off of this new amount. This is called interest capitalization, and I had no idea that was happening.

It was a struggle to make ends meet, even living at home. I still kept my eye out for other jobs, but I could not find a better opportunity. Eventually, I started doing contract work with another lawyer friend of my dad’s, but that did not work out very well. The pay and work were horrible. After 6 months or so, I quit. I was going to be fired anyway.

2008 marched on. My parents were still trying to file bankruptcy, but they could not meet the requirements to finalize it. Near the end of the year, my parents told my brother and I that they were walking away from the house and that we would have to find another place to live. I was working more hours at my job, but I was still barely making enough money to meet my current expenses. My brother and I moved out of my parent’s house.

At one point in January of 2009, money was so tight that I was sure that I would not have enough money to buy food for the week. With a little help from my family, I did not go hungry, but it’s so scary to live so close to the edge. I know there are numerous people who deal with this kind of situation every day.

It was not until March of 2009 that my life took a turn for the better. After I quit/was fired from the contract job, I started delivering pizza. This turned out to be the best thing I ever did. I made enough money to meet my bills. I gained more experience at my paralegal job. I soon moved on from that job and moved on to work at accounts payable job at the end of 2009. This new accounts payable job was a temporary job, and I decided that it was time to make a big change. When the job ended in April of 2010, my girlfriend and I decided to move to another city.

We visited our new city, and with a little help from my girlfriend’s dad, I lined up a job interview.

I got the job. I moved away.

This was no magic bullet. After 2 years since the move, I am finally making full payments on my student loans. I feel very fortunate that with hard word, help from family and friends, that I was able to start digging myself out of this hole. I’m on track to pay my loans off in approximately 10 years.

It is useless to ask if I regret my decision. The past is the past, and I would not be who I was today if I did not make these choices. There is a small part of me that wonders, “there has to be a better way. Students need to understand the risk they are taking.” I also think that the whole loan business needs a complete overhaul, but that is another post for another day.